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Fund Times

Fund Times: Turnaround Specialist Leaves RS Investments

Existing RS managers to lead strong-performing Large Cap Alpha.

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Morningstar has learned that RS Investments manager Manind Govil is leaving the firm. Govil successfully turned the poor performing  RS Large Cap Alpha (GPAFX) (formerly RS Core Equity Fund) into a standout since taking it over Aug. 1, 2005. Govil, who performed a similar feat at the now-extinct Mercantile Growth & Income before coming to RS, has not publicly announced where he is headed.

Under his tenure, shareholders have beaten the market. Govil led the fund to a less than 30% loss last year, beating 95% of his large-blend peers and trouncing the S&P 500 by more than 750 basis points (or hundredths of a percent) by steering clear of the troubled financial sector and finding some of the few winners in the recession like  McDonald's (MCD). Since his arrival in 2005, the fund is down roughly 9% cumulatively compared with the S&P 500's more than 30% cumulative loss.

This is a huge blow to RS and the shareholders of this fund. We're admirers of Govil and his bottom-up investment process and have attributed part of his success over the last few years to his focus on avoiding costly mistakes, rather than anticipating huge payoffs from holdings. The management team taking over the fund, which includes the managers of  RS Value (RSVAX), while experienced, use a slightly different investment strategy which has not held up as well as Govil's since the bear market that started in October 2007.

For our complete analysis, including what we think shareholders of this fund should do in the wake of this news, please read our updated  Analyst Report, available to Morningstar.com Premium Members. 

Mutual Fund Industry Veteran Jack Dreyfus Passes Away
Jack Dreyfus, who founded one of the first mutual funds in the 1950s, has died in New York. He was 95 years old. Dreyfus founded the fund that bears his name and was one of the first to advertise to retail investors. His funds are famous for their picture of a lion's head.

Dreyfus turned over management of the fund in 1965. He retired in 1970 with an estimated net worth of more than $100 million, the Associated Press reported.

Ryan Leggio does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.